Tag Archives: property

How To Be An Average People

I must say this is a very weird topic to write about, I am going to talk about how to become an average people in this post. It is so weird because I am a normal guy myself and I guess most of my readers fall in this category too. So, what do I going to write in this post?

I am not a wise old man in case this is your first time visting this blog and you can see my photo in my about me page. What I like to share here are some observations of life of a average people.

9 to 5, until 65?
Interestingly, this is not consider a bad deal anymore because there are a lot more of people might need to work from 9 to 6, until 76. I believe this is motivated more by lack of financial strength rather than the love of their job.

Being an employee myself, I can’t say I totally understand how boss think, but one thing I quite sure is always on boss mind would be “how can I make my staff work their best?”. And I truly believe a person who works not because they need to but choose to is a more productive person. Not every “retired” person would be more productive but I like to believe that the percentage would be higher in this category.

Enjoy while you can, like there is no tomorrow
I ever met some friends (mostly youngster) who told me life is to be enjoyed, not for suffering. I agreed with their statement but I think my interpretation of that statement is different from theirs. One of the most commonly complain I hear from people about engaging in some hobby is those hobby spend too much money and they would like to avoid that. On the other side of the conversation, I heard people saying what’s the point saving up the money, what if tomorrow is the end of the world? I believed they link saving money to hardship which I think is a myth. I met people online and offline all the time enjoying their life with a very low budget by modern living standard. They practice frugality in life, enjoy free hobby and make full use of their time to do meaningful thing for themselves and community.

Buy a expensive house
I don’t own a house and I don’t claim myself as a property expert because I am not. It is just scary when I heard people bought a house that cost them majority of their income every month for 30 years, and that is from the combined income of a couple. For those with the financial power to choose, do choose a house that is not costing you arm and leg every month and limit your potential to retire earlier rather than later.

Buy everything you can buy
I am a fan of early retirement extreme idea. It is about building skills to reduce expense and increase your chance of surviving in a poor economy. You don’t be so extreme like Jacob, but you can use some creativity before you make any purchase. Can you buy equivalent with cheaper price? Can you make one yourself? Can you get it free?

Treat debt as a normal part of life
Before I took a serious look at my financial situation, I heard advice from friends and relative that student loan is common, I should just take my time to pay it off since the interest rate is so low. My thinking changed after read through Mr Money Mustache blog post that talk about debt emergency. I start to focus to pay off my student loan as fast as possible by cutting down non-essential expense and put all those money toward my debt.

Consumer debt is another monster in this category. Nowadays I am amused by the ads saying “Own this or that as low as $XXX per month!” or “$0 for the first three months, X% after that.” I think when you bought something or own something, mean you bought it or own it. Ownership don’t come at $XXX per month but $XXXX per item.

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A Very Simple Early Retirement Plan

Although I am still in the debt-paying phase of my early retirement journey, I am constantly searching for profitable investment opportunity that is simple enough for me to take advantage when I am done with current phase and moving into investment phase. Some ideas were given to me through word of mouth, newspaper and blog:

Property

Property market in Singapore is really booming for the past few years where we see a price increase up to 2-3 times of the original selling price. And this is happening all over the island and no one know when will the party ends. Increasing property price create an investment opportunity but the high property price also means a higher barrier for normal people to invest.

Stock

Stock is the second thing come to mind when people are talking about income generating asset. If you want to buy stock in Singapore, you will need a CDP account and a broker account. I have both of them but somehow I does not feel comfortable to link my money with the fate of one single company.

Exchange-Traded Fund (ETF)

I read it first on Mr Money Mustache, after that on Tan Kin Lian blog and then Jim’s blog. You don’t link your money with the fate of one single company but the top 30 in the Singapore. No doubt there is always chance that all 30 companies fails, but admittedly they should have lower chance to fail together. One of the good things about ETF is the lower expense ratio (basically means your cost of investment) compare to the regular fund, usually less than 1% per annum.

For Singapore, I found 2 available ETF, which are SPDR Straits Times Index ETF and Nikko AM Singapore Straits Times Index ETF.  They both are having an expense ratio of about 0.3% per annum. Based on what I understood from their website, this two ETF will replicate as closely as possible the performance of Straits Times Index and can be traded like any share on Singapore Exchange. Everything seems ok with this investment except I can’t find any information about their dividend payout.

 

Ok, I think my very simple early retirement plan is getting really complex by now. With so many investment choices lying around Singapore, it seems early retirement was not so far ahead and beyond the reach of normal people like us.

So, here is what my current early retirement plan look like:

  1. Control Spending (I think I have done pretty good in this area)
  2. Clear Debt (Still working on this, 4 more months to go!!!)
  3. Invest in one of the STI ETF mentioned above (or maybe both).
  4. Keep searching for ways to builds income stream that does not require my attention (at least not full attention) after initial setup.

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Filed under Debt, Passive Income, Save, Spend